Continental installed a WiFi hotspot in its
frequent flyer lounge at the Boston Logan International Airport. It provides WiFi access for free.

The MPA has demanded removal of the antenna.
The MPA asserted in a letter to Continental (which is attached to the petition)
that there is a "potential threat to public safety
caused by Continental’s unauthorized and unlawful wireless communications". The
MPA asserts that Continental's service creates an interference problem.

However, the correspondence attached to the
petition suggests that the MPA's concern is not with radio frequency
interference. Rather, Continental's free service is interfering with the
extraction of monopoly rents from WiFi users, most of whom are not Boston area
residents. See, full story.

7/29. The U.S. Court of Appeals (4thCir)
issued its opinion
in Venkatraman v. REI, a racial discrimination case. There are many
discrimination cases in the federal courts. What is distinctive about this one
is that the plaintiff is a software engineer who also alleges illegal conduct in
the hiring of foreign workers under the H1B visa program.

The Court of Appeals affirmed the
District Court's dismissal of the complaint. It held that his employment
discrimination claim fails because he failed to exhaust administrative remedies.
It also held that there is no private right of action against an employer for
lying to the INS to obtain H1B visas for high tech workers.

Kirthi Venkatraman is a U.S. citizen of Indian origin. He needs no visa to
work in the U.S. However, his former employer did hire alien workers under the
H1B visa program for high tech workers. REI fired him. Venkatraman asserts that
REI paid him less than its white workers
and fired him for complaining of this treatment. He also alleges that REI lied
to the INS to obtain H1B visas for other workers.

Venkatraman filed a complaint in U.S.
District Court (EDVa) against REI alleging (1) employment discrimination, in
violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et
seq., (2) wrongful discharge in violation of public policy, (3) infliction of
emotional distress, (4) violation of immigration laws. REI moved to
dismiss the complaint.

At issue on appeal are the District Court's dismissal of counts (1), (2), and
(4). However, the District Court also dismissed count (3). The Court of Appeals
affirmed.

The Court wrote that before filing a Title VII employment
discrimination claim in court, one must first a charge with the Equal Employment
Opportunity Commission (EEOC). Venkatraman did not. The Court of Appeals also
rejected his argument he has a discrimination claim under Title VI, which
prohibits discrimination "under any program or activity receiving Federal
financial assistance", for the simple reason that he did not raise it in the
District Court. Hence, the Court of Appeals affirmed the dismissal of the
employment discrimination count.

The Court also affirmed the dismissal of the second count,
wrongful discharge in violation of public policy, on the basis that it is either
a federal Title VII claim (on which he failed to exhaust his EEOC remedy), or a
state claim which has been precluded by an opinion of the Virginia Supreme
Court.

The Court also affirmed the dismissal of the fourth count
alleging violation of immigration law. Venkatraman alleged that REI had hired
numerous H1B non-immigrants by falsely representing to the Immigration and
Naturalization Service (INS) that there was a shortage of qualified U.S.
workers. He alleged that such actions are in violation of
8 U.S.C. § 1182(n), and that a private right of action for a violation of §
1182(n) must be implied.

The Court of Appeals held that § 1182(n) does not create a
private right of action.

This case is Kirthi Venkatraman v. REI Systems, Inc, U.S. Court of Appeals for the
4th Circuit, App. Ct. No. 03-1679,
an appeal from the U.S. District Court for the Eastern District of Virginia, at
Alexandria, D.C. No. CA-03-278-A, Judge T.S. Ellis
presiding. Judge Widener wrote the opinion of the Court of Appeals, in which Judges
Duncan and Quarles joined.

The letter was written for the Rep. Joe
Barton (R-TX) and Rep. John Dingell
(D-MI), the Chairman and ranking Democrats of the HCC, as well as the Chairmen
and ranking Democrats on two of the HCC's subcommittees.

The letter states that "Electronic attacks can be the result of individuals (such as
hackers) or groups, such terrorist organizations or foreign governments,
attempting to gain unauthorized access to a specific organization’s networks or
systems or from malicious computer programs or codes, such as viruses or worms,
that seek to damage data or deny access to legitimate users." (Parentheses
in original.)

The letter then identifies five elements of a sound information security program:

"Information security policies and procedures that cover all
major systems and facilities and outline the duties of those responsible for
security,
Access controls to prevent unauthorized access to networks and information systems,
Intrusion detection systems that monitor for attempts to gain unauthorized access to
networks and information systems,
Incident response procedures to address electronic attacks or breaches, and
Testing and assessments of an organization’s vulnerability to attack and audits of
its information security practices and controls."

The GAO examined the information security practices of financial market
organizations, which it did not identify. It found that "all seven of the selected
financial market organizations are taking steps to prevent their operations from being disrupted
by electronic attacks. Each of the organizations had implemented the five major
elements of a sound information security program. However, we identified actions
that each organization could take to further improve their protections against
attacks or unauthorized access."

People and Appointments

7/29. The Senate confirmed former Rep. Christopher Cox
(R-CA), Roel Campos, and Annette Nazarath to be Commissioners of the
Securities and Exchange Commission (SEC). Cox
has been designated by President Bush to be Chairman. His term expires on June
5, 2009. Campos, who was reappointed, has a new term that expires on June 5,
2010. Nazareth has term that expires on June 5, 2007. See also,
story
titled "Rep. Cox to Replace Donaldson as SEC Chairman" in
TLJ Daily E-Mail
Alert No. 1,146, June 2, 2005.

7/29. The Senate confirmed Josette Shiner to be an Under Secretary of
State (Economic, Business, and Agricultural Affairs). She was Deputy U.S. Trade
Representative. Before that, she was Associate U.S. Trade Representative for
Policy and Communications. Before that, she was P/CEO of a group named Empower
America. She is also a former Managing Editor of the Washington Times.

7/29. The Senate confirmed Karen Hughes to be Under Secretary of State
for Public Diplomacy.

7/29. The Senate confirmed Kristen Silverberg to be an Assistant
Secretary of State (International Organization Affairs). She was Deputy
Assistant to the President and Advisor to the Chief of Staff in the White House.
Before that, she was Deputy Assistant to the President for Domestic Policy.
Before that, she was Senior Advisor to Ambassador Paul Bremer in Iraq. And
before that, she was Special Assistant to the President in the Office of the
Chief of Staff. Before her positions in the Bush administration, she worked for
the Bush Cheney 2000 campaign. She has also worked for the Washington DC office
of the law firm of Williams & Connolly, for Supreme
Court Justice Clarence Thomas, and for U.S. Court
of Appeals (DCCir) Judge David Sentelle.

7/29. The Senate confirmed Shara Aranoff to be Commissioner of the
U.S. International Trade Commission (USITC)
for the remainder of a nine year term expiring on December 16, 2012. Sen. Harry Reid (D-NV), the Senate Democratic
Leader, designated Aranoff for nomination to a Democratic position on the USITC.
She was Senior International Trade Counsel on the Democratic staff of the
Senate Finance Committee. She has also
worked in the USITC's Office of General Counsel, and for the law firm of
Steptoe & Johnson. She replaces Marcia
Miller, whose term has expired. Sen. Max Baucus
(D-MT), the ranking Democrat on the Senate Finance
Committee, praised Aranoff in a January
release
[PDF].

7/29. The Senate confirmed Sandra Pack to be an Assistant Secretary of
the Treasury, Timothy Adams to be an Under Secretary of the Treasury,
Randal Quarles to be an Under Secretary of the Treasury, Kevin Fromer
to be a Deputy Secretary of the Treasury, and Robert Kimmitt to be a
Deputy Secretary of the Treasury.

7/29. The Senate confirmed Michael J. Garcia to be the U.S. Attorney
for the Southern District of New York for a term of four years.

First, the FCC will consider a Notice of Inquiry (NOI)
concerning the effects of anticompetitive conduct and circuit disruption by
foreign carriers on U.S. international routes.

Second, the FCC will consider a NOI that requests comments to
assist it in preparing its 12th annual report on the status of competition in
the market for the delivery of video programming.

Third, the FCC will consider an Order on Reconsideration
regarding its service rules for advanced wireless services in the 1710-1755 MHz
and 2110-2155 MHz bands. This is WT Docket No. 02-353.

As with other recent events, the agenda for this event is short
and non-controversial. With the departure of Michael Powell, there are two
Democrats and two Republicans. More significant FCC decisions are likely to be
delayed until there are again five Commissioners. This will not likely be soon.
The Senate, which must confirm any nominee for FCC Commissioner, is on recess
until after Labor Day. Then, the Senate will have some other major items on its
Fall agenda, including consideration of the nomination of John Roberts to be a
Justice of the U.S. Supreme Court.

This event is scheduled for 9:30 AM on Thursday, June 9, 2005 in
the FCC's Commission Meeting Room, Room TW-C305, 445 12th Street, SW. The event will
be webcast by the FCC. The FCC does not always take up all of the items on its
agenda. The FCC does not always start its monthly meetings at the scheduled time.
The FCC usually does not release at its meetings copies of the items that its
adopts at its meetings.

7/28. Secretary of Homeland Security
Michael Chertoff
gave a speech in Santa
Clara, California, to the Commonwealth Club of
California in which he discussed technology
and the provisions in the Homeland Security Act of 2002 that limit liability for
certain anti terrorism technologies. He also addressed cyber security.

Companies that develop and sell anti terrorism technologies could face
lawsuits, and massive liability, when terrorist attacks occur. This gives would
be technology developers a disincentive to develop anti terrorism related
technologies. The SAFETY Act, which is a part of the Homeland Security Act,
pertains to this problem. However, its effectiveness in incenting technology
development may be limited by several things.

For example, it only offers protection to "qualified anti-terrorism
technologies". That is, the developer must first obtain certification from the
Department of Homeland Security (DHS). The
lengthy and burdensome regulatory review process has resulted in few
certifications. Also, once the developer qualifies, the limitation on liability
is only partial. Secretary Chertoff stated the the DHS "not done enough to take
advantage" of the SAFETY Act's provisions.

The Congress enacted the "Support Anti-terrorism by Fostering Effective
Technologies Act of 2002", or SAFETY Act, as Subtitle G of Title VII of the
"Homeland Security Act of 2002", or HSA. The HSA was
HR 5005 in
the 107th Congress. It is now Public Law No. 107-296.

The SAFETY Act provides that "There shall exist a Federal cause of action
for claims arising out of, relating to, or resulting from an act of terrorism when
qualified anti-terrorism technologies have been deployed in defense against or
response or recovery from such act and such claims result or may result in loss
to the Seller."

It then provides that "Such appropriate district court of the United States
shall have original and exclusive jurisdiction over all actions for any claim
for loss of property, personal injury, or death arising out of, relating to, or
resulting from an act of terrorism when qualified anti-terrorism technologies
have been deployed in defense against or response or recovery from such act and
such claims result or may result in loss to the Seller."

The SAFTETY Act also prohibits the award of punitive damages. It also limits
non-economic damages. It provides that "Noneconomic damages may be awarded
against a defendant only in an amount directly proportional to the percentage of
responsibility of such defendant for the harm to the plaintiff, and no plaintiff
may recover noneconomic damages unless the plaintiff suffered physical harm."

The SAFETY Act provides no protection in any litigation brought by
governmental authority under a criminal statute. Nor does it provide any
limitation on liability in civil actions if the defendant "attempts to commit
... any criminal act".

The Act also creates a "rebuttable presumption that the government contractor
defense applies" in product liability litigation, but only for "qualified
anti-terrorism technologies approved by the Secretary".

Chertoff (at left)
stated that "Technology can play a role in the detection of a threatened nuclear attack.
Technology can be deployed in the form of biological sensors throughout our cities to detect
the release of dangerous toxins. Technology provides the ability to screen passengers with
just the simple swipe of a finger or screen cargo without ever opening a lid."

"Of course to realize the full benefits technology has to offer, we are
looking beyond the walls of DHS -- to the private sector, to the high tech world.
To the innovators who have made our world so much smaller, we are now looking to
you to help make it that much safer."

Chertoff continued that "we recognize our responsibility to support and aid
these efforts in any way we can. For example, three years ago, Congress passed the SAFETY
Act to enable our private sector partners to develop innovative technology to protect the
homeland without the fear of unduly high transaction costs imposed by the possibility of
frivolous lawsuits."

He concluded that "we have not done enough to take advantage of this
powerful tool to spur new technologies and new systems. We are streamlining the application
process and working to deploy incentives under the SAFETY Act more broadly, with
the hope that these changes will motivate the private sector to take full
advantage of this tool."

Cyber Security. Chertoff stated that "when it comes to securing the
cyber systems that connect and control much of our infrastructure, we depend on
our technology providers to take a direct role and partner with us in cyber risk
assessment and mitigation to achieve the measure of security we all desire." He
added that "the vast majority of our cyber assets are privately owned and
operated. It therefore follows that security cannot take the form of government
dictates, but must be the product of strong partnership work and disciplined
collaboration."

He said that "There are several steps we must take. These include maintaining
and enhancing a robust cyberspace response system, furthering information
sharing and supporting working partnerships between government and industry –
operationally and on strategic issues such as software assurance and corporate
governance. In addition, we must work to integrate cyber priorities into our
infrastructure protection plans and prepare ourselves to respond to new
technology threats.

Chertoff added that "we are working to finalize a National Infrastructure
Protection Plan that will offer baseline preparedness plans and response
protocols for seventeen critical infrastructure sectors and resources including
Information Technology, Agriculture, Water, and Energy. We’re working closely
with a variety of stakeholders to develop our plan for the IT portion, but we’re
also looking at the kind of impact IT has on other infrastructures."

4th Circuit Reinstates Hatfill's Defamation
Suit Against NYT

7/28. The U.S. Court of Appeals
(4thCir) issued its divided
opinion [25
pages in PDF] in Hatfill v. New York Times, a defamation case. The
District Court dismissed for failure to state a claim. A three judge panel of
the Court of Appeals reversed. Judge Niemeyer dissented.

The Department of Justice has not prosecuted anyone for mailing letters
containing anthrax spores in the fall of 2001. However, the Federal
Bureau of Investigation (FBI) has investigated Steven Hatfill, a research
scientist who is a germ warfare specialist.

Nicholas Kristoff is employed by the New York Times (NYT), a daily newspaper.
Kristoff wrote on numerous occasions about the 2001 anthrax mailings, and the
FBI's investigation. Hatfill asserts that this defamed him.

Hatfill filed a complaint in U.S.
District Court (EDVa) against the NYT and Kristoff alleging defamation and
intentional infliction of emotional distress, under Virginia state law. Hatfill
dismissed the claims against Kristoff, on the basis that the court lacks
personal jurisdiction over him.

The District Court dismissed the claims against the NYT for failure to state
a claim upon which relief can be granted, pursuant to Rule 12(b)(6) of the
Federal Rules of Civil Procedure. Hatfill appealed.

The Court of Appeals reversed. Judge Dennis Shedd wrote the opinion for the
majority. He quoted extensively from Kristoff's pieces in the NYT, and concluded that
the complaint adequately alleges claims for defamation and intentional infliction of
emotional distress, based upon the courts construction of the Kristoff pieces.

Judge Niemeyer wrote a dissent. He argued that
Kristoff criticized the FBI's handling of the investigation of Hatfill, and the
Kristoff argued that the FBI should have been pursuing certain leads regarding
Hatfill, but that Kristoff never accused Hatfill of sending the anthrax, or
committing a crime. He would have affirmed the District Court's dismissal.

This case is Steven Hatfill v. The New York Times Company and Nicholas
Kristoff, U.S. Court of Appeals for the 4th Circuit, App. Ct. No. 04-2561, an appeal
from the U.S. District Court for the Eastern District of Virginia, D.C. No. CA-04-807-A,
Judge Claude Hilton presiding. Judge Dennis Shedd wrote the opinion of the Court of Appeals,
in which Judge Wilkins joined. Judge Niemeyer dissented.

People and Appointments

7/28. The Senate confirmed Rachel Brand to be
Assistant Attorney General in charge of the
Office of Legal Policy at the Department of
Justice (DOJ). She was the Principal Deputy Assistant Attorney General in
the OLP. She previously worked as Associate Counsel to the President, for the
law firm of Cooper Carville & Rosenthal, which is now
Cooper & Clark, and for Supreme Court
Justice Anthony Kennedy. The responsibilities of the OLP relate to, among other
things, the screening, selection and confirmation of judicial nominees.

7/28. The Senate confirmed Janice Gardner to be Assistant Secretary
for Intelligence and Analysis at the Department of the Treasury.

7/28. The Senate confirmed John Redd to be Director of the National
Counterterrorism Center in the Office of the Director of National Intelligence.

More News

7/28. The Recording Industry Association of
American (RIAA) announced the filing of another round of lawsuits against
individuals in U.S. District Courts around the country alleging copyright
infringement in connection with the use of peer to peer systems. See,
release.

7/28. The Department of Justice (DOJ) announced that a grand jury of the
U.S.
District Court (WDNC) returned an indictment that charges four people with
criminal copyright infringement in connection with their alleged illegal distribution of
copyrighted movies, software, games and music on the internet. The indictment
charges David Lee Pruett (of Auburn, Washington), Alexander C. Von Eremeef
(Belmont, Massachusetts), George C. Stoutenburgh (Bennet, Colorado), Jerry M.
Melvin (Roanoke, Virginia). The DOJ also announced in a
release that
it charged four additional persons by criminal information with conspiracy to commit
criminal copyright infringement. These people are David Chen Pui (Fountain Valley,
California), Shawn W. Laemmrich (Calumet, Michigan), Scott John Walls (Spokane, Washington),
and Franklin Edward Littell (Martinsville, Indiana).

7/28. The Office of Management and
Budget (OMB) sent a
memorandum [PDF] to chief information officers at executive
departments and agencies that contains instructions for agency annual reporting
under the E-Government Act of 2002.

House Approves DR-CAFTA Free Trade Bill

7/27. The House approved
HR 3045,
the "Dominican Republic-Central America-United States Free Trade Agreement
Implementation Act", by a vote of 217-215. The vote broke down largely along
party lines, with Republicans voting 202-27, and Democrats voting 15-187. See,
Roll
Call No. 443.

Like the vote on the Bipartisan Trade Promotion Authority Act of 2001, this
vote was close. Also, like the 2001 vote, the Republican leadership kept open
the voting long beyond the expiration of 15 minutes, to persuade more members to
vote for the measure. The vote continued for over an hour, until midnight, to
enable proponents to collect a majority in favor. See also, story titled "House
Passes Trade Promotion Authority Bill" in
TLJ Daily E-Mail
Alert No. 323, December 7, 2001.

Opponents of the bill argued various protectionist theories regarding loss of jobs,
impact on unions, and environmentalism.

Robert Portman, the U.S. Trade Representative
(USTR), stated in a
release that "Tonight is an historic night for American leadership on free
and fair trade. House passage of CAFTA-DR will create jobs and economic growth
here at home and promote democracy, prosperity and hope in the Central American
region. This win sends a powerful signal to the region and the world that the
United States will continue to lead in opening markets and leveling the playing
field."

The Senate has already passed its CAFTA bill. The bill now goes to the
President, who will sign it.

President Bush released a
statement immediately after the vote. "I am proud that the House of
Representatives has acted to advance America's economic and national security
interests by passing the CAFTA-DR agreement. CAFTA helps ensure that free trade
is fair trade. By lowering trade barriers to American goods in Central American
markets to a level now enjoyed by their goods in the U.S., this agreement will
level the playing field and help American workers, farmers, and small
businesses. The agreement is more than a trade bill; it is a commitment of
freedom-loving nations to advance peace and prosperity throughout the Western
hemisphere. We have a moral obligation and a vital national security interest in
helping the democracies of Central America and the Dominican Republic succeed,
and CAFTA furthers that goal. I look forward to signing this important
legislation into law."

On July 18, 2005, the UN's WGIG released a
report [24 pages in PDF] titled
"Report of the Working Group on Internet Governance". This report states the
UN's ambitious case for acquiring vast power to regulate various aspects of the operation
and use of the internet. See, story titled "UN Seeks Vast Authority to Regulate Operation
and Use of the Internet" in TLJ Daily E-Mail Alert No. 1,178, July 20, 2005.

Barr
(at right) He wrote that "A U.N. ``working group´´ -- talk about a oxymoron -- has
proposed that this organization, which recently gave us the multibillion-dollar
fiasco known as ``oil-for-food,´´ be given control of regulating the working
mechanism of the Internet. You heard right: Put the United Nations in charge of
the Internet! Of interest to those who understand the inner workings of the
Internet, or who follow political machinations of world politics, is the makeup
of this Working Group on Internet Governance. The membership reads like a list
of the old, so-called ``nonaligned´´ nations group (which was anything but
nonaligned), and includes such high-tech, free enterprise champions as Cuba and
Iran." (Parentheses in original.)

He continued that "While such a proposal brings tears of laughter to those
of us in the United States who understand that the magic of the Internet lies not in
government regulation but in the free market and universal access, the fact that the
United Nations proposes it play a role in regulating the Internet means, at a minimum,
that the idea will be the subject of interminable bureaucratic deliberations. It
will foster a permanent bureaucracy of its own, will cost millions, and will
result in repeated tirades against the exploitation of the Internet by the
developed nations against the interests of the Third World."

He concluded that "The meddling by the United Nations is boundless. It is
aggravating. It is costly. But mostly, it is just plain wrong. And someone needs to
stand up and tell it so."

Barr suggests that John Bolton, the new U.S. Ambassador to the UN, is
appropriate for the task.

However, Michael Gallagher, the head of the U.S.
National Telecommunications and Information Administration (NTIA), stated bluntly,
on June 30, 2005, that the U.S. will not yield to any UN request to take control of the
domain name system (DNS). See, story titled "NTIA Rebuffs UN Efforts to Gain Control
Over Internet Governance" in TLJ Daily E-Mail Alert No. 1,166, July 1, 2005.

On September 19-30, The International
Telecommunications Union (ITU) will host the third meeting of the Preparatory
Committee (PrepCom3) in Geneva, Switzerland, for the second meeting of the World Summit
on Information Society (WSIS), to be held in Tunis, Tunisia, on November 16-18, 2005. See,
WSIS web site.

Appeals Court Affirms in Telemarketing Sales
Rule Case

7/27. The U.S. Court of Appeals
(7thCir) issued its
opinion [12 pages in PDF] in FTC v. World Media Brokers, a
telemarketing sales rule case involving the sale of Canadian lottery tickets by
telephone to consumers in the U.S. This is not legal. Yet, the telemarketers
deceived consumers about this. The Court of Appeals affirmed the District
Court's $19 Million judgment against both corporate defendants, and two individuals.
The Court's opinion sets for the circumstances under which individuals can be held
liable for the deceptive acts of corporations under the FTC Act.

The U.S. Federal Trade Commission (FTC)
filed a complaint [PDF]
in U.S. District Court (NDIll) on
September 30, 2002, against World Media Brokers, related corporate entities and
dbas, and its principals, alleging violation of § 5(a) of the FTC Act, which is
codified at 15 U.S.C. § 45(a). It prohibits unfair or deceptive acts or
practices in or affecting commerce. The complaint also alleged violation of §§
13(b) and 19 of the FTC Act, 15 U.S.C. §§ 53(b) and 57b, the Telemarketing and
Consumer Fraud and Abuse Prevention Act, 15 U.S.C. § 6101-6108, and the FTC
Telemarketing Sales Rule (TSR), 16 C.F.R. § 310.1-9.

The District Court entered judgment against five corporate entities, and two
principals, George Yemec and Anita Rapp, individually. It enjoined further violations
of the law, and ordered the payment of $19 Million in consumer redress.

The Appeals Court affirmed. It held that individuals can be held liable for
the deceptive practices of a corporation in violation of § 5(a) of the FTC Act
if it demonstrates that "the individual defendants either participated directly
in the deceptive acts or practices or had authority to control them". The Court
continued that the FTC "must also prove that the individual defendants either
knew or should have known about the deceptive practices, but it is not required
to prove subjective intent to defraud. ... Instead, the FTC may fulfill the
knowledge requirement with evidence that the individuals had ``actual knowledge
of material misrepresentations, reckless indifference to the truth or falsity of
such misrepresentations, or an awareness of a high probability of fraud along
with an intentional avoidance of the truth.´´" (Citations omitted.)

This case is Federal Trade Commission v. World Media Brokers, et al.,
U.S. Court of Appeals for the 7th Circuit, App. Ct. No. 04-2721, an appeal from
the U.S. District Court for the Northern District of Illinois, Eastern Division,
D.C. No. 02 C 6985, Judge Amy St. Eve presiding. Judge Rovner wrote the
opinion of the Court of Appeals, in which Judges Bauer and Easterbrook joined.

7/27. The Electronic Privacy Information
Center (EPIC) released a
memorandum
[27 pages in PDF] regarding the Department
of Defense's (DOD) military recruitment database. The EPIC writes that
"The database will be managed by a private direct
marketing firm and will include such information as grade point average,
ethnicity, and social security number. The proposal raises significant questions
about the Department's compliance with the Privacy Act."

7/27. The U.S. Court of Appeals
(11thCir) issued its
opinion
[13 pages in PDF] in Maverick Boat Company v. American Marine Holdings,
a copyright infringement and trade dress infringement case involving boat hull
designs. Not everything in the Digital Millennium Copyright Act (DMCA) pertains
to digital works. The Congress included in the DMCA the Vessel Hull Design Protection
Act (VHDPA). It is now codified at 17 U.S.C. § 1301 et seq. This was a response to the
opinion of the Supreme Court in Bonito Boats, Inc. v. Thunder Craft
Boats, Inc., 489 U.S. 141 (1989). The District Court cancelled Maverick's
copyright registration, and denied its claims for copyright and trade dress
infringement. The Court of Appeals affirmed. This case is Maverick Boat
Company, Inc. v. American Marine Holdings, Inc., U.S. Court of Appeals for
the 11th Circuit, App. Ct. No. 04-11259, an appeal from the U.S. District Court
for the Southern District of Florida, D.C. Nos. 02-14102 CV-DMM and 02-14283 CV-DMM.
Judge Dubina wrote the opinion of the Court of Appeals, in which Judges Fay and
Goldberg joined.

7/27. The Federal Communications Commission
(FCC) published a
notice in the Federal Register that states that the
Office of Management and Budget
(OMB) has approved the extensive information collection mandates contained in the
FCC's VOIP E911 Order. See, Federal Register, July 27, 2005, Vol. 70, No. 143, at Page 43323.
See also, the FCC's document titled
"First
Report and Order and Notice of Proposed Rulemaking" [90 pages in PDF], numbered FCC
05-116, adopted on May 19, 2005, and released on June 3, 2005. See also, the order contained
in the FCC's document titled
"Public
Notice' [PDF], numbered DA 05-2085, and released on July 26, 2005. These orders were
issued in FCC proceedings regarding extending elements of the regulatory regime for
communications to internet protocol based services: "In the Matter of IP-Enabled
Services", numbered WC Docket No. 04-36, and "E911 Requirements for IP-Enabled
Service Providers", numbered WC Docket No. 05-196.

7/27. The National Institute of Standards and
Technology (NIST) Computer Security Division
released NIST
Special Publication (SP) 800-79 [59 pages in PDF' titled "Guidelines for
the Certification and Accreditation of PIV Card Issuing Organizations". PIV
is personal identity verification. The guidelines in this document are for use
by federal departments and agencies issuing, or preparing to issue, PIV cards
that comply with Federal Information Processing Standard (FIPS) 201 to their
federal employees and/or federal contractor employees.

The Business Software Alliance (BSA) is
pleased. Robert Holleyman, P/CEO of the BSA, wrote in a
release that "Today's action is a significant step forward in the fight
against worldwide cybercrime. The BSA and its member companies have long
advocated loud and clear that the U.S. Senate take up and pass this important
international treaty. With the rise of organized cybercrime, and information and
data theft, businesses and consumers are increasingly recognizing the importance
of protecting themselves and thwarting such attacks. By passing the treaty
today, Chairman Lugar and the committee are sending the right signal to our
international partners who work with us to fight these global, borderless
criminals. We urge the full Senate to take up and pass this treaty in short
order so we have the necessary tools to deter and prosecute global cybercrime."

The Electronic Privacy Information Center
(EPIC) opposes ratification of this treaty. Marc Rotenberg and Cedric Laurent of
the EPIC wrote a
letter to Sen. Richard Lugar
(R-IN) on July 26. They stated that "The treaty would create invasive
investigative techniques while failing to provide meaningful privacy and civil
liberties safeguards, and specifically lacking judicial review and probable
cause determinations required under the Fourth Amendment. A significant number
of provisions grant sweeping investigative powers of computer search and seizure
and government surveillance of voice, e-mail, and data communications in the
interests of law enforcement agencies, but are not counterbalanced by
accompanying protections of individual rights or limit on governments' use of
these powers."

Sen. Hatch Comments on Judicial Selection
and IP Law

7/26. Senate Judiciary
Committee's Subcommittee on Intellectual Property held a hearing titled
"Perspective on Patents: Harmonization and Other Matters".
Sen. Orrin Hatch (R-UT), the Chairman of
the Subcommittee, was the only Senator to participate in the hearing.

The Federal Circuit has exclusive jurisdiction over appeals in most patent
related cases. See,
28 U.S.C. § 1295. The DC Circuit hears many cases that involve the 1984
Hatch-Waxman amendments to the Food, Drug, and Cosmetic Act. This was the "Drug
Price Competition and Patent Term Restoration Act of 1984. It is Public Law No.
98-417.

The Senate Judiciary Committee has jurisdiction over both intellectual
property bills and appointments to the federal judiciary and to the
U.S. Patent and Trademark Office (USPTO).

Rep. Cox stated in his
prepared testimony [PDF]
that "I will strongly support the Commission's ongoing work to ensure that the
rules governing our financial markets keep pace with advancing technology. The
rapid globalization of securities markets, and the amazing development of the
Internet as a medium for commerce and information, have taken place at the same
time that the number of Americans who are directly invested in securities has
reached a record level. These developments offer both investors and issuers
extraordinary new opportunities -- but they also bring unprecedented risks. As a
result, the work of the SEC is now more important than ever."

Roel Campos stated in his
prepared testimony
[PDF] that the SEC " must continue to reduce and eliminate antiquated rules".

7/26. The Federal Communications
Commission (FCC) released a
document
[PDF] in its proceedings titled "In the Matter of IP-Enabled Services" and
numbered WC Docket No. 04-36, and "E911 Requirements for IP-Enabled Service
Providers" and WC Docket No. 05-196.

This document amends and expands upon the requirements imposed upon the providers
of interconnected VOIP services with respect to mandatory notice to their
customers, mandatory acquisition of responses from customers, mandatory
reporting to the FCC, and mandatory cancellation of service.

Universal Service. Martin stated that "The universal
service mechanism is breaking. The method for carriers to contribute into the
fund is outdated. It doesn’t adequately account for the increase in bundled
service offerings, the migration to wireless and VoIP services, and the
shrinking long distance market. Similarly, the way that the funds are
distributed is fraught with complexity."

He said that "it is critical that there be a sufficient and
sustainable mechanism to collect funds in an efficient manner." He added that "I
have urged the Commission to begin assessing contributions primarily based on
working telephone numbers rather than interstate revenue." This would entail
taxing internet protocol based services that assign subscribers numbers.

Intercarrier
Compensation. Martin (at left) stated that "The intercarrier compensation scheme
is breaking. The existing scheme is simply unsustainable in a competitive environment
characterized by bundles and mobility."

He said that the FCC "must adopt a rational and unified approach
that replaces the current patchwork of rules. Any new framework must remove the
opportunities for regulatory arbitrage and provide incentives for efficient
investment decisions."

He continued that "we must move to a single unitary rate for all
the different types of traffic -- wireless, wireline, VoIP, local, long
distance, interstate, intrastate. In today’s converging IP world, these
distinctions are unsustainable and create opportunities for people to game the
system."

Regulatory Parity. He stated that "We also suffer from a
market-distorting lack of regulatory certainty in the broadband market. Most
prominently, for some time there has been a lack of regulatory parity between
telcos and cable in their provision of broadband."

He said that "we should place all broadband providers on equal footing so
that they can fairly compete in the marketplace -- not in front of regulators". And,
he said that Supreme Court's June 26
opinion [59
pages in PDF] in NCTA v. Brand X "provides us the opportunity to
make this happen."

Martin said that "I have already shared with my colleagues a
proposal that would give telcos the same deregulatory treatment as cable. It is
my strong hope that this order will be adopted as soon as possible so that
consumers can reap the benefits of continued infrastructure investment and the
increased deployment of broadband services."

CALEA. Martin also discussed extending the Communications Assistance
for Law Enforcement Act (CALEA) regulatory regime to internet services. He said
that "broadband Internet access providers and VoIP
providers cannot escape the ability of law enforcement to conduct legitimate
surveillance", and that "law enforcement agencies must have the ability to
conduct electronic surveillance over these new technologies."

PFF Paper Criticizes Compulsory Music
Licensing

7/26. The Progress and Freedom Foundation
(PFF) released a
paper [13 pages in PDF] titled "Why Government Can't Be Trusted With Trust Funds:
A 118-Year-Old Case Study Highlights the Dangers of Compulsory Licensing". It was
written by Patrick Ross of the
PFF.

It reviews and criticizes various proposals to replace the current
copyright regime for music with compulsory licensing of digital music, and compensation
for creators provided from a government trust, funded by taxation of such things
as ISPs or consumer electronic devices.

Ross argues first that the government has a poor record of administering
other trust funds. He discusses the example of the Dawes Act of 1887 and the federal
government's failed management of Indian lands and the Indian Trust Fund.

He states that both compulsory licensing and trust funds "involve the federal
government attempting to monitor the marketplace, and extract rent from one
party to fund another. This is an extremely difficult thing to do, but a
relatively simple thing for a market to perform. Both also are systems that,
once in place, are difficult to dismantle, because parties in the system become
dependent on them."

He concludes that "Just because the Internet has enabled theft of intellectual
property in ways never before contemplated does not mean our existing system
should be abandoned. Rather, those claiming to support artists and their right
to be compensated should defend the current legal structure -- incrementally
improve it where warranted -- and work constructively to promote artists and
mitigate the harmful impact of online theft."

10th Circuit Rules on When Copyright
Registration Occurs

7/26. The U.S. Court of Appeals
(10thCir) issued its
opinion [28 pages in PDF]
in La Resolana Architects v. Clay Realtors Angel Fire, a case regarding
the registration of works with the Copyright
Office (CO). Registration is required before a copyright holder can sue for infringement.
The 10th Circuit held that registration does not occur until the CO decides upon an
application. Other courts have held that proof of application for registration is
sufficient.

The present case involves architectural plans. However, this issue is more critical
in the area of online infringement of digital works, where obtaining immediate injunctive
relief may be essential. Yet, it takes time to obtain a certificate of registration from
the CO. For example, Napster argued, unsuccessfully, that works with pending registration
applications are not entitled to the same rebuttable presumption as registered works.

The plaintiff, La Resolana Architects (LRA) is an architectural firm in Sante
Fe, New Mexico. It created some architectural designs for townhouses. It showed
these designs to Clay Realtors Angel Fire (Clay). The parties never reached an
agreement. However, Clay went on to build townhouses in Angel Fire, New Mexico,
which LRA alleges are similar to those depicted in the designs shown to Clay.

LRA applied to register the copyrighted drawings with the CO,
by sending the requisite applications, fees, and deposits. The CO confirmed receipt of
these materials.

Before the CO issued a certificate of registration, LRA filed a complaint in
U.S. District Court (NMex) against Clay and
others alleging copyright infringement. More specifically, LRA applied to register its
copyright on November 6, 2003. It filed suit on November 20, 2003. On January 22, 2004
the CO approved the registration, with an effective registration date of November 19,
2003. On March 10, 2004, the CO wrote a letter stating this. It did not send LRA a
certificate of copyright registration.

The District Court held that the CO letter was inadmissable, and that the
copyright had not been registered. It dismissed the complaint.

LRA appealed. The Court of Appeals affirmed.

Registration of a copyrighted work is voluntary.
17 U.S.C §
408(a) provides, in part, that "registration is not a condition of copyright
infringement." However, registration is a necessary prerequisite for filing
suit, except when the CO refuses to register.
17 U.S.C. § 411 provides, in part, that "no action for infringement of the copyright
in any United States work shall be instituted until registration of the copyright claim
has been made in accordance with this title." See also,
17 U.S.C. § 410, regarding "Registration of claim and issuance of certificate"

The Court of Appeals held that "registration occurs when the copyright office
actually approves or rejects the application".

It wrote that "Registration is satisfied by completing the following steps:
a. application and payment of fee, § 408;
b. deposit of a copy of the copyrightable material, § 408;
c. examination by the Register of Copyrights, § 410;
d. registration (or refusal to register) by the Register, § 410;
e. issuance of certificate of registration, § 410.
The plain language of the statute thus requires a series of affirmative steps by
both the applicant and the Copyright Office. No language in the Act suggests
that registration is accomplished by mere receipt of copyrightable material by
the Copyright Office. Instead, the Register of Copyrights must affirmatively
determine copyright protection is warranted, § 411, before registration occurs
under the Act. And only upon registration or refusal to register is a copyright
holder entitled to sue for copyright infringement under § 411. Until those steps
are followed and registration is ``made,´´ federal courts lack subject matter
jurisdiction over the infringement claim." (Parentheses in original. Footnotes
omitted.)

The Court added that "registration is separate
from the issuance of a registration certificate and that a court’s jurisdiction
does not turn on the existence of a paper certificate, but rather on the fact of
registration, however it is demonstrated."

The Court also reviewed the opinions of other courts. Some require that the copyright
holder actually receive the certificate of registration. On the other hand, some courts
allow suit to be maintained merely by proving payment of the required fee, deposit of
the work in question, and receipt by the Copyright Office of a registration application.
See, for example, Apple Barrel Productions, Inc. v. Beard, 730 F.2d 384 (5th Cir.
1984). Also, Nimmer on Copyright, at Vol. 2 § 7.16[B][1][a], pages 7-154-56, backs
the 5th Circuit approach.

Thus, there exists a split between circuits on this issue.

Perhaps it should also be noted that the Congress enacted the
Family Entertainment and Copyright Act of 2005 (FECA) earlier this year. It was
S 167. It is
now Public Law No. 109-9. See also, story titled "House Approves Copyright Bill"
in TLJ Daily E-Mail
Alert No. 1,119, April 20, 2005.

The FECA does not address the issue in this case. However, it may have contributed
to the lack of clarity of the law regarding registration. The FECA contains a provision
that requires the Register of Copyrights to "establish procedures for preregistration
of a work that is being prepared for commercial distribution and has not been published
... for any work that is in a class of works that the Register determines has
had a history of infringement prior to authorized commercial distribution". It
also provides that infringement actions may be based upon these preregistrations.

The CO is in the process of writing implementing regulations.
See also, story titled "Copyright Office Commences Rulemaking on
Preregistration of Unpublished Works" in TLJ Daily E-Mail Alert No. 1,181, July
25, 2005.

Judge Timothy Tymkovich wrote the opinion of the Appeals Court. Tymkovich, who
probably lacks substantial experience in dealing with the Copyright Office (see,
biography), also wrote that
"registering a copyright is a relatively simple and inexpensive process".

This case is La Resolana Architects v. Clay Realtors Angel Fire, et al., U.S.
Court of Appeals for the 10th Circuit, App. Ct. No. 04-2127, an appeal from the U.S.
District Court for the District of New Mexico, D.C. No. CIV-03-1337-ACT/RHS. Judge
Tymkovich wrote the opinion of the Court of Appeals, in which Judges Lucero and Blackburn
joined.

7/26. The U.S. Court of Appeals (10thCir)
issued its opinion [22 pages
in PDF] in Yanaki v. Iomed, a Section 1983 case involving the
search of the residence, and seizure of computer equipment, of a former employee
of a pharmaceutical company that accused him of misappropriation of trade
secrets and breach of a confidentiality agreement. The Court of Appeals affirmed
the District Court's dismissal of the complaint for failure to state a claim.

Jamal Yanaki previously worked for Iomed, Inc., a pharmaceutical company
based in Salt Lake City, Utah. Iomed filed a complaint in state court in Utah
against Yanaki. It also obtained an ex parte order directing local police, with
the assistance of Iomed, to execute a search of Yanaki’s residence.

A state court issued the orders regarding the search. State police officers
searched Yanaki's home. But, Yanaki does not challenge the constitutionality of
the state laws upon which the orders were based.

Yanaki then filed a complaint in U.S. District Court (DUtah) agaisnt Iomed
and some of its employees and lawyers, alleging violation of
42 U.S.C. § 1983. He alleged deprivation of his 4th Amendment right to be free from
unreasonable searches and seizures, among other things.

Section 1983 provides, in part, that "Every person who, under color of any
statute, ordinance, regulation, custom, or usage, of any State or Territory or
the District of Columbia, subjects, or causes to be subjected, any citizen of
the United States or other person within the jurisdiction thereof to the
deprivation of any rights, privileges, or immunities secured by the Constitution
and laws, shall be liable to the party injured in an action at law, suit in
equity, or other proper proceeding for redress, except that in any action
brought against a judicial officer for an act or omission taken in such
officer’s judicial capacity, injunctive relief shall not be granted unless a
declaratory decree was violated or declaratory relief was unavailable."

The Court of Appeals held that Yanaki failed to plead the "under color of any
statute" element of a Section 1983 claim. It held that Yanaki merely asserts
private misuse of a state laws, which is not actionable under Section 1983.

This case is Jamal Yanaki, et al. v. Iomed, Inc., et al., U.S. Court of
Appeals for the 10th Circuit, App. Ct. No. 04-4061, an appeal from the U.S. District
Court for the District of Utah, D.C. No. 2:03-CV-345-DB. Judge Murphy wrote the opinion
of the Court of Appeals, in which Judges Holloway and Briscoe joined.

7/26. The House rejected
HR 3283,
the "United States Trade Rights Enforcement Act", by a vote of
240-186. See, Roll Call
No. 421. The bill was considered under suspension of the rules, which means
that a two-thirds majority was required for approval. It was a party vote.
Republicans voted 221-5. Democrats voted 19-180.